1997 (3) TMI 239 - AT - Customs

Summary

Issues Involved:
1. Whether "Foley's Catheter" qualifies as "equipment, apparatus, and appliances" under Notification No. 63/88 for customs duty exemption.
2. Whether "Foley's Catheter" is a consumable item and thus excluded from the benefits of the Notification.
3. Whether the importation of the item by a non-hospital entity affects the eligibility for exemption under the Notification.

Issue-wise Detailed Analysis:

1. Qualification of "Foley's Catheter" as Equipment, Apparatus, and Appliances:
The primary issue is whether "Foley's Catheter" falls under the category of "equipment, apparatus, and appliances" as per Notification No. 63/88. The Notification exempts such items from customs duty provided they are used in hospitals and meet specific certification requirements. The appellant argued that "Foley's Catheter" is a functional item used for managing urinary incontinence, dwelling inside the human body for a certain period, and is comparable to disposable syringes. The Assistant Collector and the Collector (Appeals) had previously rejected this claim, classifying the item as consumable based on its definition in the dictionary and not as equipment or apparatus. However, the Tribunal noted that previous judgments and expert opinions have consistently classified "Foley Balloon Catheters" as life-saving equipment. Thus, the Tribunal concluded that "Foley's Catheter" should be considered as equipment under the Notification.

2. Classification as a Consumable Item:
The second issue is whether "Foley's Catheter" should be classified as a consumable item, which would exclude it from the benefits of the Notification. The Assistant Collector had relied on the dictionary definition of consumables, which broadly means "something that we can consume." However, the Tribunal emphasized that the term "consumable" has not been explicitly defined in the Notification. The Tribunal referred to the definition in the Import and Export Policy, which states that a consumable is an item required in a manufacturing process but does not form part of the end product. The Tribunal also cited previous judgments, including the case of Indian Telephone Industries Ltd. v. Collector of Customs, which held that consumable items are typically chemicals used up during research and not items like silicone rubber sleevings or "Foley's Catheter." The Tribunal concluded that "Foley's Catheter" does not fall within the ambit of consumable items and should be considered as equipment.

3. Importation by Non-Hospital Entity:
The third issue is whether the importation of "Foley's Catheter" by a non-hospital entity affects the eligibility for customs duty exemption. The Assistant Collector had argued that the benefit of the Notification is available only if the medical goods are imported directly by hospitals. However, the Tribunal noted that the Notification does not specify that the items must be imported directly by hospitals. The appellants had produced a certificate from the Directorate General of Health Services and endorsements from the medical superintendent of Lok Nayak Jai Prakash Narain Hospital, confirming that the supplies were made to a government hospital. The Tribunal observed that the Notification covers hospitals run by various authorities, including central and state governments, local authorities, and registered societies. Therefore, the Tribunal concluded that the importation by a non-hospital entity does not disqualify the item from exemption, provided the conditions of the Notification are met.

Conclusion:
The Tribunal set aside the impugned order and allowed the appeal, concluding that "Foley's Catheter" qualifies as equipment under Notification No. 63/88, is not a consumable item, and that the importation by a non-hospital entity does not affect the eligibility for exemption.